WSJournal. Moscow Exchange Plans IPO

MOSCOW—Russia's primary stock exchange said Monday that it intends to float shares in an initial public offering on its own platform in Moscow, in a push to promote the Russian capital as an international financial center.

The Moscow Exchange said it would offer shares to institutional and retail investors in Russia, as well as offshore investors and qualified institutions in the U.S. In a statement, the exchange offered few details about the offering, but a person familiar with the matter said the deal size is expected to be around $500 million.

Exchange officials said the success of the offering is hoped to encourage more investment through the Moscow Exchange, convince more Russian companies to list solely in Moscow and sell the city as a center for international finance. Currently only 65% of Moscow-listed equities are traded directly through the exchange.

"The exchange's own listing is a key element of our strategy to promote the development of the local capital markets as well as to broaden the regional and international appeal of Moscow as a financial center," said Sergei Shvetsov, chairman of the exchange's supervisory board. "As a public company, Moscow Exchange will be committed to demonstrating leadership in corporate governance practices and transparency."

The exact timing of the listing isn't clear, but the exchange must make the offering before June 30, as part of an agreement made when the Micex and dollar-denominated RTS exchanges merged in December 2011.

A source close to the matter has said the exchange hopes for a valuation of between $4 billion and $6 billion. When the Micex RTS merged in 2011, the resulting Moscow Exchange was valued at $4.5 billion.

The investment banks handling the IPO will be J.P. Morgan Chase JPM +0.04% & Co., Credit Suisse Group AG, CSGN.VX +0.64% Sberbank SBRCY +2.38% and VTB Bank. The bookrunners will be Renaissance Capital, Deutsche Bank AG, DBK.XE +0.11% UBS AG, Goldman Sachs Group Inc. GS +2.44% and Morgan Stanley MS +7.86% .

The exchange's two largest shareholders—the Bank of Russia with a 24.3% stake, and Sberbank with a 10.3% stake—have both said they would not sell any of their shares in an IPO.

The last major IPO of a Russian stock was the offering of mobile phone operator MegaFon MFON.MZ +1.01% in late November, when it raised $1.83 billion in London and Moscow. In September, Sberbank raised $5.1 billion in a secondary offering.